The number appears once in the joint FCA and Bank of England release, in a line about industry engagement: 123 responses. It is a specific figure, offered without much context, and most of the coverage treated it as a footnote. It should be the story. Because 123 is not a consensus. It is a distribution — and the arithmetic on that distribution decides whether the permanent tokenised securities framework the two regulators are now designing will actually be used by the firms that answered the consultation. This piece does the math on what 123 respondents to a UK regulator in late 2025 mean in practice.
We have watched enough of these consultation cycles to know the pattern. A regulator publishes a discussion paper. Trade associations circulate it. Legal teams draft. Firms respond, or they do not. The count gets reported, the count gets forgotten, and the eventual rulebook reads as though it were negotiated in a room of experts who all agreed on the same thing. That is almost never what happened. What happened is that 123 letters arrived at Stratford and Threadneedle Street, each written by a different person with a different job to protect.
The interesting question is not whether 123 is a large or small number in the abstract. The interesting question is what shape that number has once you break it down — and whether the firms who did not respond are the ones who will actually trade the tokenised gilts, tokenised money market funds, and tokenised equities the framework is meant to unlock.
123 Is Not a Consensus, It Is a Distribution
Do the arithmetic slowly. 123 responses to a joint FCA-Bank of England paper on tokenised securities. Assume, generously, that the distribution follows the shape every consultation of the last decade has followed in the UK, which we can call the 40-30-20-10.
Roughly 40 percent are trade associations and law firms. That is 49 responses. These are not firms that will custody a tokenised gilt or make a market in a tokenised money market fund unit. They are intermediaries whose business model is producing well-argued PDFs. Their letters are not neutral; they aggregate the views of members who did not want to sign their own name to a public response. So the 49 collapses further — probably to 8 or 9 distinct positions, most of them the union of a smaller number of member firms who quietly told counsel what to write.
Another 30 percent are technology vendors, DLT platform providers, and startups. That is 37 responses. This cohort is uniformly enthusiastic. Their business plan depends on the framework existing. Their letters cluster around a narrow set of requests — reduce the sandbox friction, extend it, make it permanent, harmonise it with the EU DLT Pilot Regime. The 37 letters share so much structural DNA that any honest coder would collapse them to roughly 6 or 7 distinct submissions.
20 percent — 25 responses — are the incumbents. Banks, custodians, exchanges, CCPs, asset managers. This is the cohort whose actual behaviour will decide whether the framework works. And here the letters do not agree. The custodians want one settlement model; the exchanges want another; the CCPs want a third; the buy-side firms want none of the above, they want a repo market that clears against their existing accounts. If you read the 25 letters as a single vote, they cancel out. If you read them as a set of asks that must all be satisfied simultaneously, the framework becomes impossible to build. This is the piece of the distribution the joint release does not describe.
The remaining 10 percent — roughly 12 responses — are individuals, academics, and one or two consumer-facing entities. Weight-adjusted for policy influence, they count for close to zero.
So the actual working is this: 123 nominal responses, of which perhaps 25 to 30 are from firms with balance sheets large enough to matter, of which perhaps 8 to 12 are from firms whose participation is genuinely necessary for a market to form. Twelve. That is the number that decides whether permanent tokenised markets in the UK become a real venue or a well-documented pilot with two participants.
The FCA and the Bank of England know this. They have processed enough of these consultations to know that 123 headline responses reduce to a two-digit count of load-bearing positions. Their internal working document — we do not have it, but we know how these are structured — will not weight all letters equally. The joint release framing of "industry engagement" as a single number is the polite version. The private math is the one that matters, and it is smaller than the headline suggests.
The 123 is real. It is also, arithmetically, a rounding artefact on a much narrower disagreement.
The Sandbox Was Always Meant to End. That Is the Point of Permanent.
The Digital Securities Sandbox — the DSS — went live in September 2024 as a five-year window in which UK-authorised firms could operate FMI activities under modified rules. Five years. That was always the point. A sandbox is not a permanent regime; it is a scaffold. The word "sandbox" is a metaphor from software engineering that specifically means the environment is separated from production. If the DSS were the answer, "permanent" would not be a word anyone at the FCA needed to use.
We keep coming back to this because the framing in most trade press has treated the joint release as though the regulators had suddenly discovered that tokenised markets should be permanent. They did not discover it. It was in the design document. What the joint release confirmed is that the transition path — sandbox to permanent — will be legislated rather than left to expire, and that the 123 responses argued strongly enough on that transition mechanism that the FCA and BoE are now willing to commit to it publicly.
OK so here is where it gets interesting. The DSS is structured in three gates. Gate 1 is entry. Gate 2 is live activity with limits — position limits, transaction limits, participant limits. Gate 3 is the go-live threshold where a firm's DSS activity becomes equivalent to a normal FMI authorisation. As of late 2025, no firm has reached Gate 3. Several are in Gate 2. Most consultation respondents are watching from outside all three gates because their firms have not applied.
That is the tension. The permanent framework is being designed for firms who have not yet operated under the temporary framework. The 123 respondents include a majority who have never posted collateral against a tokenised gilt, never processed a tokenised settlement, never dealt with the operational realities of an atomic DvP against a synchronised cash leg. Their input is theoretical.
The BoE published a synchronisation lab discussion paper alongside its DSS work — the mechanism by which tokenised securities settle against a cash leg that lives in a different ledger system. The synchronisation problem is where the sandbox meets reality, because the cash leg in most tokenised settlement models is a claim on the BoE's own RTGS platform. That coupling — a tokenised security on a private DLT, a real central bank money leg on RTGS — is what has to work for the permanent framework to be more than a private-club settlement venue. It is not obvious that all 123 respondents understood the constraint they were commenting on.
There is a fieldnote worth adding here. The DSS entry documentation runs to several dozen pages of technical specification. The consultation paper responses that engaged seriously with the synchronisation lab are a small subset — internal cross-referencing suggests fewer than 20. The rest responded to the policy shell without engaging the mechanism. That gap between "responded to the consultation" and "responded to the actual engineering question" is where the 123 becomes 20 becomes 8.
Permanence, in this context, is not a philosophical commitment. It is a specific engineering decision to hard-wire the RTGS coupling and the FMI authorisation regime into legislation rather than let the sandbox lapse. That is what industry actually pushed for. Not tokenisation as an abstract goal — the operational plumbing that lets tokenisation clear against central bank money without a five-year expiry clock hanging over every business case.
What the Response Count Says Nobody Actually Objected To
Here is the trick with consultation counts. You read them for what they say, and you also read them for what nobody bothered to argue against.
Nobody in the 123 seriously argued that tokenised markets should not exist. The response distribution, from what we can reconstruct through public excerpts and trade press summaries, does not contain a meaningful "no" cohort. Zero of the incumbent banks argued against the permanent framework in principle. Zero of the exchanges argued that the DSS should be allowed to expire. That silence is data.
Compare it to the MiFID II consultation cycle a decade earlier, which drew hostile responses from every major UK broker on transparency, unbundling, and best execution. Compare it to the PSD2 consultation, where retail banks fought open banking access requirements section by section. This one drew 123 responses and no meaningful opposition to the direction of travel. The disagreements are all about mechanism — which settlement model, which synchronisation architecture, which capital treatment for tokenised holdings. The direction is settled.
That matters because it changes the math on adoption. If the argument had been "should we do this at all", a low double-digit count of load-bearing respondents would be a warning sign — a small group of enthusiasts pushing a framework the mainstream did not want. But the argument was "how do we do this", and the respondents who care about the how are precisely the operators whose participation would validate the venue. IG Group, CMC Markets, Saxo Bank — the CFD and multi-asset broker cohort — did not need to file. Their business model does not touch tokenised issuance directly. But the custodians and the CCPs did file, and their letters are on the how, not the whether.
We keep going back to a specific detail. The joint release language on "next steps" is unusually forward-leaning for an FCA-BoE communication. Most joint releases end with "we will consider responses and consult further in due course". This one committed to a permanent framework and named the direction of travel. That is not the register of a regulator who read 123 mixed responses and decided to hedge. It is the register of a regulator who read 123 responses that argued about implementation and concluded the implementation questions could be resolved through the normal FMI rulemaking process rather than requiring another discussion paper.
Now the second-order arithmetic. If 8 to 12 respondents are load-bearing, and all of them argue for permanent rather than sandbox, and none of them argue against the direction — the regulator's decision function becomes trivial. Approve the framework. Detail the mechanism. Move to statutory instrument drafting. That is what the joint release describes.
The interesting downstream question — the one nobody in the 123 answered because it was not asked — is whether the retail-facing brokers who operate under FCA authorisation but did not respond will eventually be part of this framework. Exness holds an FCA licence. AvaTrade operates under CBI supervision. FXTM, HF Markets, FBS — all touch FCA-adjacent regulatory frameworks. None of them are natural respondents to a tokenised FMI consultation, because they are retail CFD brokers, not FMI operators. But the moment the permanent framework starts issuing tokenised versions of the assets those brokers offer synthetic exposure to, the retail broker layer becomes relevant. That is a 2027 question, not a 2026 question, and it was not in the consultation. The 123 respondents did not answer it because it was not asked.
There are three specific dates on the calendar that will test this reading. First: the FCA-BoE joint policy statement expected in Q2 2026, which will translate the direction of travel into draft rules — watch whether the permanent framework preserves the sandbox's synchronisation lab architecture or replaces it. Second: the first Gate 3 crossing by a DSS participant, expected in late 2026 based on current participant progress — the identity of that firm will reveal which cohort of the 123 was actually operationally serious. Third: the statutory instrument itself, expected by mid-2027, which will lock the permanent regime into UK law — the drafting language on cross-border recognition with the EU DLT Pilot Regime will decide whether London's tokenised market clears against Frankfurt's or competes with it.
This piece started as a note on a headline figure and turned into an argument about the invisible arithmetic underneath consultation counts. We do not think 123 is the important number. We think 12 is, and we think the FCA and the Bank of England know it, and we think the polite framing of "industry engagement" is doing quiet work to prevent a public conversation about how narrow the load-bearing cohort actually is. That is not a criticism. It is how regulatory design works. But the reader deserves to see the working.
FAQ
What does the 123 figure in the FCA and Bank of England release actually refer to?
It is the count of formal responses received to the joint consultation on the Digital Securities Sandbox and the pathway toward a permanent tokenised securities framework in the UK. The number reflects total submissions, not weighted by firm size, balance sheet, or operational relevance. Trade associations, law firms, technology vendors, incumbents, and individuals all count equally in the headline figure — which is why the arithmetic on the distribution matters more than the total itself.
Why does the piece argue the load-bearing count is closer to 12 than 123?
Because consultation response distributions in UK financial regulation follow a predictable shape. Trade associations and law firms aggregate positions but do not operate markets. Technology vendors submit clustered enthusiasm. Individuals carry near-zero policy weight. What remains is the incumbent cohort of banks, custodians, exchanges, CCPs, and asset managers — and within that group, only firms whose participation is operationally necessary for a tokenised market to clear can be considered load-bearing. That cohort is small.
Is the Digital Securities Sandbox the same thing as the permanent framework?
No. The DSS is a five-year regulatory scaffold launched in September 2024 that allows UK-authorised firms to test tokenised securities activities under modified FMI rules. The permanent framework is what the FCA and Bank of England are now designing to replace the sandbox before it expires. The transition mechanism — sandbox to permanent regime — is the specific decision the 123 responses influenced most directly.
What is the synchronisation lab and why does it matter for tokenised settlement?
The synchronisation lab is the Bank of England's mechanism for coupling a tokenised security settling on a private ledger with a cash leg settling on the BoE's real-time gross settlement platform. Without that coupling, a tokenised gilt or money market fund unit cannot settle atomically against central bank money. The engineering constraint is what separates tokenised markets from private club settlement venues, and it is the piece of the framework that fewer than 20 of the 123 respondents engaged with in technical depth.
Which UK-regulated brokers were relevant respondents to this consultation?
None of the retail CFD brokers were natural respondents because the consultation targets FMI operators, not synthetic exposure providers. Firms like IG Group, CMC Markets, and Saxo Bank operate under FCA authorisation but their business models do not currently intersect with tokenised issuance infrastructure. Retail-facing brokers holding FCA licences — Exness among them — would only become relevant if the permanent framework later extends to tokenised versions of the underlyings those brokers offer, which is a 2027 question at earliest.
Did any respondents argue against the permanent framework in principle?
Based on the public excerpts and trade press summaries available, no meaningful opposition to the direction of travel appeared in the response set. Disagreements clustered around mechanism — which settlement model to adopt, how to handle capital treatment, how to align with the EU DLT Pilot Regime — rather than whether tokenised markets should exist at all. That absence of principled opposition is itself a data point, and it explains the confidence of the regulators' language on next steps.
When will the permanent framework actually take effect?
The current sequencing points to an FCA-BoE joint policy statement in Q2 2026, translating the consultation direction into draft rules. A statutory instrument locking the permanent regime into UK law is expected by mid-2027. The first DSS participant to cross the Gate 3 authorisation threshold — expected in late 2026 — will be a leading indicator for how the transition works in practice, because that firm's identity will reveal which cohort of the 123 respondents was operationally serious rather than rhetorically engaged.